You Should Definitely Discuss Things with a Licensed Elder Law Attorney If You Want to be Comprehensively

Prepared for the Latter Portion of Your Life

WHAT QUESTIONS SHOULD I ASK AN ELDER

LAW ATTORNEY IN INDIANA?

PAUL A. KRAFT Indiana Estate Planning Attorney

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The United States population is aging rapidly. This is due to the maturation of the baby boomer generation. Thousands of people are attaining senior citizen status on a daily basis, and there are certain legal concerns that you would naturally have as an elder. Elder law attorneys assist people who want to react to the legal ramifications of aging. You should definitely discuss things with a licensed attorney if you want to be comprehensively prepared for the latter portion of your life. When you consult with an elder law attorney, there are certain important questions that you should ask. In this paper we will look at a few of them that are at the top of the list.

1.) How do I know if I will be eligible for Medicare coverage as a senior citizen?

Medicare is a government health insurance program that you pay into while you are working and paying taxes. Taxpayers earn retirement credits each year. In 2014, you earn one retirement credits for each $1200 that you earn. You can accumulate a maximum of four credits during a tax year. Once you have accrued 40 retirement credits, you will qualify for Medicare when you reach the age of 65.

2.) Will Medicare take care of all of my health care needs? The answer to this question is no. There are out-of-pocket expenses that must be paid, and you should be aware of these costs when you are budgeting for retirement. Medicare will not pay for long-term care at all. If you need help with your day-

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to-day needs on an ongoing basis, you cannot count on Medicare to help with the costs. Assisted living communities and nursing home costs would not be covered, and in-home custodial care would not be covered either.

3.) Can I just pay out-of-pocket? You can certainly pay for long-term care out-of-pocket if you can afford it. However, long-term care is extremely expensive at the present time, and costs

are rising year-by-year. We practice law in the state of Indiana. According to a study that is being conducted on an ongoing basis by Genworth Financial, the median annual cost for a private room in a nursing home in 2014 in our state is $85,775. The median expense for a year in a

private one-bedroom unit in an assisted living community is $44,685. A government survey that was done a couple of years ago found that the average length of stay was around two years and three months. Approximately 10 percent of people in nursing homes will ultimately reside in the facilities for at least five years.

4.) Is it likely that I will need long-term care? The United States Department of Health and Human Services states that 70 percent of people who are turning 65 will someday need help with their activities of daily living. It is quite likely that you will require long-term care at some point in time.

5.) I'm not poor, but I'm not rich. How can I prepare for these costs? Most of the long-term care that is received by elders is paid for by the Medicaid program. Medicaid exists to provide health care insurance for people who have

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very limited financial resources. However, many people who were never poor ultimately qualify for Medicaid. You could potentially qualify for Medicaid through a process called a Medicaid spend down. The name is somewhat self-explanatory: you spend down or give away assets before you apply for Medicaid to pay for long-term care.

6.) Can I give away my assets to my children as soon as I find out I need long-term care? This is not an effective solution, because there is a five-year Medicaid look-back period. The Medicaid evaluators will examine your financial transactions going back five years. If they find that you have given away assets within five years of applying for the program, your application will be denied. A penalty would be imposed. The duration of the penalty would be determined by comparing the amount of the divestitures to the average cost of long-term care in the state of Indiana. Because of the existence of the five-year look-back, you must plan ahead in advance to be able to qualify for Medicaid at the right time.

7.) Who handles my financial affairs if I become incapacitated due to Alzheimer's disease. Essentially, that's up to you. If you do nothing, the state could be petitioned to appoint a guardian to act on your behalf. This is not an appealing prospect to many people, because you would have no control over the choice of a representative. You can take the matter into your own hands by executing a legally binding document called a durable power of attorney. With this device you empower someone of your own choosing to handle your affairs in the event of your

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incapacitation.

CONCLUSION

In this paper we have looked at seven relevant questions. There are other issues to consider if you want to be comprehensively prepared for the eventualities of aging. Everyone should discuss the future with a licensed elder law attorney. You can ask questions that come to mind, but you can also count on your attorney to provide you with additional information that you need to know. If you have not yet consulted with an elder law attorney, now is the time to take action.

REFERENCES

United States Department of Health and Human Services www.longtermcare.gov Genworth Financial https://www.genworth.com/corporate/about-genworth/industry-expertise/cost-of-care.html Social Security Administration http://www.ssa.gov/retire2/credits1.htm

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About the Author Paul A. Kraft

Paul Kraft is Co-Founder and the senior Principal of Frank & Kraft, one of the leading law firms in Indiana in the area of estate planning as well as business and tax planning.

Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work. In addition to his practice, Mr. Kraft has lectured extensively in the areas of living trust planning, Medicaid planning, and presenting public and private seminars on the importance of proper estate planning. He has also authored various articles on estate planning and is a contributing author of LEGACY: Plan, Protect, and Preserve Your Estate–Practical Answers from America’s Foremost Estate Planning Attorneys. Mr. Kraft is a co-founder of the Indiana Network of Estate

Planning Professionals, a charter member of the American Academy of Estate Planning Attorneys and a founding member of the National Network of Estate Planning Attorneys. He is also a member of the Indianapolis Bar Association, including the Taxation, Business Law and Estate Planning sections; the Indiana State Bar Association, including the section on Taxation Law; the Indiana CPA Society; and the Estate Planning Council of Indianapolis. Mr. Kraft is admitted to practice law before the Supreme Court of Indiana, U.S. District Courts, and U.S. Tax Court.

Frank & Kraft A Professional Corporation Attorneys at Law www.FrankKraft.com 135 N. Pennsylvania Street Suite 1100 Indianapolis, IN46204-2485 Phone: (317) 684-1100 Fax: (317) 684-6111